Flashcards in Types of Businesses Deck (7)
Sole Trader: Define, Features, Advantages and Disadvantages.
Def: A sole trader is a business owned by one person.
Feat: unlimited liability, registered in the Australian Securities and Investments Commission (ASIC),
Ad: No tax upon businesses profits only personal income, low start up cost, complete control over the company.
Dis: Unlimited Liability, difficult to raise funds for expansion, burden of management.
Partnership: Define, Features, Advantages and Disadvantages.
Def: A business with a minimum of 2 and a maximum of 20 owners.
Feat: Unlimited liability including for partners debt, silent partner, min 2 max 20 owners.
Ad: pooled funds and talent, only have to pay tax on personal income not businesses profits, shared responsibility and workload.
Dis: Unlimited Liability, possibility for disputes, a division in authority and loyalty
Incorporation: Define, Features, Advantages and Disadvantages.
Def: a process in which a business becomes an company.
Feat: Limited Liability, Private and Public companies.
Ad: separate legal entity (Limited Liability), easy transfer of ownership, experienced management through a board of directors.
Dis: cost of formation, double taxation, requirement to public annual report.
Public Listed Companies: Define and the Features
Def: An incorporated business with a minimum of 5 shareholders, whose shares are freely traded on the Australian Securities Exchange (ASX)
Feat: Registered on the ASX, min of 5 shareholders, min of 3 directors, Ltd is after its name, audited accounts each year.
Private Listed Companies: Define and Features
Def: An incorporated company with a minimum of 2 and a maximum of 50 private shareholders who are chosen by the company for whom they wish to own the business
Feat: Limited Liability, min of 2 and a max of 50 shareholders, Pty Ltd is after its name
Social Enterprise; Define, Features, Advantages and Disadvantages.
Def: A Business with the main objective is to fulfil a social need.
Feat: primary objective is to fulfill a social need, any profit made goes back into the business.
Ad: can open up new markets, meeting a social need can increase profit and market share.
Dis: Difficulty obtaining initial funds to start business, significant operating cost, it can be difficult focusing on both the financial and social need.